/raid1/www/Hosts/bankrupt/CAR_Public/021030.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, October 30, 2002, Vol. 4, No. 215
Headlines
AUSTRALIA: Ambulance Workers Win Wage Suit, To Receive $6M From Govt
AUTOMOBILE INDUSTRY: Warns Of Inability To Meet "Smart" Air-Bag Rules
CALIFORNIA: Sport Fishermen Oppose Fishing Ban Around Marine Sanctuary
CANADA: To Appeal Ruling Absolving Anglican Church of Sex Abuse Charges
CIGNA CORP.: Snags Arise In Settlement Over Bill "Chopping" Software
COMPUTER ASSOCIATES: New Documents Present Evidence V. Top Executives
CREDIT SUISSE: Faces New Civil Lawsuit Over Securities Act Violations
DAYTON POWER: Experts Say Company Board Unable To Protect Shareholders
FLORIDA: Miramar Homeowners Pursue Relief From Blasting Disturbances
FREDDIE MAC: Faces Suit For Violations of Fair Credit Reporting Act
HMO LITIGATION: Defendants Request Stay of Discovery, Pending Review
LIVENT INC.: CIBC To Settle Securities Fraud Suit For $2.2 Million
MENORAH GARDENS: Lawyers Want Documents Available To Other Firms
TEXAS: Group To File Suit If Galveston Restricts Vehicles From Beaches
New Security Fraud Cases
ATLAS AIR: Leo Desmond Commences Securities Fraud Suit in S.D. New York
ATLAS AIR: Dyer & Shuman Commences Securities Fraud Suit in S.D. NY
AVISTA CORPORATION: Schiffrin & Barroway Files Securities Suit in WA
CIGNA CORPORATION: Milberg Weiss Commences Securities Suit in E.D. PA
CIGNA CORPORATION: Charles Piven Commences Securities Suit in E.D. PA
ELECTRONIC DATA: Much Shelist Lodges Securities Fraud Suit in E.D. TX
ESS TECHNOLOGY: Schiffrin & Barroway Commences Securities Suit in CA
QUADRAMED CORPORATION: Weiss & Yourman Lodges Securities Suit in CA
QUADRAMED CORPORATION: Leo Desmond Commences Securities Suit in N.D. CA
SALOMON SMITH: Weiss & Yourman Commences Securities Fraud Suit in NY
SALOMON SMITH: Weiss & Yourman Commences Securities Suit in S.D. NY
SALOMON SMITH: Weiss & Yourman Commences Securities Fraud Suit in NY
SEARS ROEBUCK: Bernstein Liebhard Commences Securities Suit in N.D. IL
ST. PAUL: Charles Piven Commences Securities Fraud Lawsuit in MN Court
ST. PAUL: Schiffrin & Barroway Lodges Securities Fraud Suit in MN Court
TXU CORPORATION: Berman DeValerio Commences Securities Suit in N.D. TX
*********
AUSTRALIA: Ambulance Workers Win Wage Suit, To Receive $6M From Govt
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The Victoria branch of the Liquor Hospitality and Miscellaneous Workers
Union (LMHU) won a US$6 million award from the Victorian Government,
after Australian federal court found the government's Ambulance
Services were liable for outstanding annual leave loading over the past
six years, labornet.com reports.
The suit was commenced by the LHMU on behalf of approximately 1800 of
its current and former union members in its ambulance division. The
suit names as defendants the Metropolitan Ambulance Service and Rural
Ambulance Victoria.
The suit seeks compensation for unpaid leave loading since 1996.
Since 1996, the Union's award and certified agreements for ambulance
officers in Victoria require 17.5% leave loading to be paid on all
annual leave. Ambulance employees receive up to 8 weeks annual leave
based on shift and rostering arrangements.
The Union argued that the Ambulance Services have not been paying the
full amount of annual leave due under the Award and certified
agreements, labornet.com reports.
Ambulance Division Secretary Rod Morris told labornet.com the decision
as a tremendous victory for ambulance officers who have been denied a
rightful entitlement for the last six years.
The Court found today that ambulance officers are entitled to annual
leave loading of 17.5% on eight weeks annual leave per year. Victorian
Ambulance officers are likely to receive between $2000 and $4000 each
as a result of the decision. The Court is yet to make a decision about
interest payments on top of the lump sums.
AUTOMOBILE INDUSTRY: Warns Of Inability To Meet "Smart" Air-Bag Rules
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A US Alliance of automobile makers has warned that many of its members
will be unable to meet a government mandate requiring a percentage of
all new vehicles sold after September next year to be equipped with
"smart" passenger-side air bags, The Wall Street Journal reports.
The auto industry is rushing to meet federal rules requiring sensors
that detect whether a child weighing less than 56.5 pounds is sitting
in the passenger-side front seat and turn the air bag off to prevent
injury. The regulations follow the death of more than 200 people,
mostly children, from air bags in the United States.
The National Highway Transportation Safety Administration (NHTSA) has
proposed that 20 percent of all vehicles sold by an auto maker after
September 2003, be equipped with the air bags, down from its original
goal of 35 percent.
However, the Alliance of Automobile Manufacturers said in a letter to
the NHTSA last week that many auto makers would be unable to meet the
regulations because of the sophisticated technology related to the air
bags. The Alliance proposed that NHTSA cut the requirement to 10
percent of vehicles sold. The penalty for failing to meet the 20
percent goal is that auto makers must stop selling vehicles until they
can reach the required volume, a NHTSA spokesman said.
Chrysler, a unit of Germany's DaimlerChrysler AG, said it was still
determining whether it could meet the 20 percent threshold. "It is
premature to give a yes-no on that," spokeswoman Ann Smith said. "We
are still working on developing the technology."
General Motors Corporation, the world's largest auto-maker said it
already has sold 112,000 model-year 2003, full-size pickup trucks and
sport-utility vehicles with the required air bags, and will have no
trouble meeting the 20 percent threshold. Ford Motor Co. will offer
smart air bags next summer on many of its popular cars, trucks and
minivans.
The automotive alliance also expresses a fear that the air bag sensors
may not always be able to tell the difference between an adult and a
child, said spokeswoman Gloria Bergquist. For example, an adult could
lean forward, taking his/her weight off the seat and cause the air bag
sensors to turn the air bag off, even though the passenger is an adult,
not a child.
CALIFORNIA: Sport Fishermen Oppose Fishing Ban Around Marine Sanctuary
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After four years of study and debate, the California Fish and Game
Commission recently approved a network of marine reserves around the
Channel Islands, creating what amounts to a network of underwater parks
where fishing is off limits, The New York Times reports.
This controversial action attracted sport fisherman who showed up en
masse at the hearing in Santa Barbara, to oppose the creation of the
reserves. As scientists testified in the daylong hearing, the
fishermen held up signs saying "wrong" and often jeered. The heated
opposition promises that the issue is not one that has been put to rest
by the Commission's action, but may return in the form of litigation
brought by devotees of the sport, who are well organized and
vociferous.
For example, Robert Fletcher, President of the Sport Fishing
Association of California, said the closures, coupled with bans on the
taking of certain fish off the coast, would cripple the sport. He told
the commissioners on the panel that "the cumulative impact is what is
going to kill recreational anglers. If we fix the management problem,
you don't have to rely so heavily on large reserves."
Another opponent, Thomas Raftican, whose organization represents some
50,000 recreational anglers in Southern California, said he believed
the problem could be addressed by better management, rather than such
vast closures.
"Management works," he said, "closures are not necessarily good
fisheries management."
However, studies have shown that, on average, marine reserves have
twice as many fish overall as areas outside the reserves. In addition,
the fish are found to be larger and lay more eggs.
Conservationists also made themselves known during the recently held
hearing before the Commission. Individual conservationists, backed by
supporters carrying "Go Big" placards, urged the Commissioners to set
aside up to 34 percent of the state waters in the sanctuary as
reserves.
The Fish and Game Commission, however, after prolonged study, chose a
somewhat cautious alternative among the several before them. The
alternatives ranged from doing nothing to closing as much as 34 percent
of the state waters in the Channel Islands National Marine Sanctuary.
The Commissioners chose a plan that bans fishing in 19 percent of the
state waters that surround Anacapa, Santa Cruz, Santa Rosa, San Miguel
and Santa Barbara Islands, covering some 175 miles. The Commission
passed the measure on a two to one vote, with two members absent.
Michael Christman, vice president of the Commission, voted against the
measure, saying he supported creation of the marine reserves, but
believed that a better means of assessing their success in preserving
the marine environment was needed before action of that kind was taken.
The reserve will be the largest off the West Coast and the third
largest in the United States, behind others in the Northern Hawaiian
Islands and the Dry Tortugas in the Florida Keys.
A national marine sanctuary was created in an area of 1,200 square
nautical miles around the Channel Islands in 1980. Its primary
purpose, however, was to ban oil and gas drilling in the area, which
stretches about six miles from the islands. Before today's vote, only
a tiny portion of the sanctuary was off limits to fishing.
"This is a watershed moment in the way we manage marine resources,"
said Matt Pickett, manager of the Channel Islands National Marine
Sanctuary. "This is the first step in looking at marine resources as
something other than fish to be caught."
Historically, fish have been managed on a species-by-species basis in
an attempt to maximize yield, said Mr. Pickett. "This (the
Commission's action) is setting aside areas strictly for the sole
benefit of having the areas (and the fish in those areas) protected for
future generations," added Mr. Pickett. The state, in the past, has
relied on methods such as short-term closure and bag limits to manage
its fisheries.
The Clinton administration developed rules to establish a series of
marine reserves across the nation, the Bush administration has
supported their creation.
Governor Gray Davis has said of the Commission's action to create
marine reserves in the Channel Islands National Marine Sanctuary, "(The
Commission's) action will allow all Californians to enjoy this diverse
wildlife area while restoring and preserving marine populations for
future generations."
CANADA: To Appeal Ruling Absolving Anglican Church of Sex Abuse Charges
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The Canadian Government is considering the appeal of an Alberta
provincial court ruling stating that Canada's Anglican Church cannot be
held responsible for decades of alleged sexual and physical abuse of
native children in boarding schools, BBC News reports.
The schools were attempt to assimilate native children, and were run by
the churches on behalf of the Canadian government. Many former pupils
of the school are taking legal action to seek compensation for the
alleged abused, which reportedly took place between 1916 and 1983.
Around 160,000 native children attended the schools, which were later
dismantled in the 1970s.
Earlier this month, a class action was launched on behalf of 91,000
native people who attended the schools, seeking more than US $8 billion
from the federal government, BBC News reports.
The provincial court ruled that there was no evidence of direct
involvement in the schools by the general synod or ruling body of the
Anglican Church. He further stated that only the church's Missionary
Society - a separate entity with little money and almost no assets -
can be named in the lawsuits.
The ruling places responsibility squarely on the Canadian government.
The government says the ruling might result in it being held liable for
all the compensation claims, estimated to cost billions of dollars.
Earlier, the Anglican Church, which administered 26 of the schools,
said it was facing bankruptcy if the recent lawsuits were successfully
pursued.
The Anglican Church of Canada says it still wants to pay out fair
compensation to the victims, BBC News states. However, as the claims
get larger, it remains to be seen what can be defined as fair for what
has now been widely recognized as decades of institutionalized abuse.
CIGNA CORP.: Snags Arise In Settlement Over Bill "Chopping" Software
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Dissension from some plaintiffs' lawyers has snagged a proposed
settlement between Cigna Corporation and hundreds of thousands of
physicians, who are suing the insurer over its use of software that
automatically chops doctors' bills to what it calculates as a more
appropriate payment, The Wall Street Journal reports.
Both Cigna and a team of plaintiffs' lawyers had hammered out a
proposed agreement under which plaintiffs estimated Cigna would end up
paying about $200 million collectively to doctors who resubmit their
medical billing. However, another group of plaintiffs' attorneys
object that the settlement does not prohibit Cigna from continuing its
practice of using the bill-chopping software.
The proposed agreement also requires physicians seeking settlement
funds to go through an onerous process of re-submitting thousands of
individual medical bills, along with medical records, going back to
1996. That process, the second group of attorneys say, could
discourage thousands of physicians and leave Cigna to repay very little
of the $200 million estimated in the proposed settlement document.
"We are unalterably opposed to the settlement because it does not
provide for meaningful change in the present egregious system," said
Timothy Norbeck, head of the Connecticut State Medical Society, a
plaintiff in the case. Meanwhile, Wendell Potter, a Cigna spokesman,
confirmed that the Philadelphia company is "in discussions" with both
sets of plaintiffs to "achieve a fair and reasonable settlement that
would resolve most, if not all" of the claims that have been made by
doctors. "But no agreement has been reached," he added.
The proposed agreement, while containing language that Cigna admits no
wrongdoing, nevertheless signals an acknowledgment that the practice of
using software to automatically cut claims could be problematic. A
settlement of any kind could have wide implications for other health
insurers, most of which face litigation over use of software that
automatically and unilaterally shaves doctors' bills.
Cigna uses a software program called ClaimCheck, made by McKesson
Corp., of San Francisco. The program screens doctors' claims for
certain combinations of procedures and eliminates or changes certain
procedure codes, coming up with an amount that results in Cigna paying
less than what the doctor billed. Insurers say the practice helps them
root out fraudulent, unnecessary or erroneous claims. Doctors claim it
unfairly deprives them of legitimate fees.
More than 450 health plans across the United States, about two-thirds
of all plans, use a group of software programs sold by McKesson to
process their claims in a way similar to how Cigna does it.
The current agreement was negotiated between Cigna and attorneys who
won class action certification in state court in Illinois in 2001. The
objections to the agreement come from another group of plaintiffs'
attorneys who won class action certification against Cigna and other
major health insurers in US district court in Miami about a month
ago. Cigna is trying to work out one agreement that would settle both
class actions.
Last Thursday, the state-court plaintiffs' attorneys who brokered the
current settlement agreement, filed a petition in the Third Judicial
Circuit Court, in Madison County, Illinois, to enforce it, arguing that
Cigna had been so far along in the process as to merit a requirement
that the Company follow through.
Details of the proposed settlement come at a particularly difficult
time for Cigna. On Friday, last week, nearly 40 percent of Cigna's
stock-market value evaporated after it announced that it would miss the
earnings projection that its own officials had confirmed only weeks
before. Granted, Cigna is still expected to post a profit this year in
its health-care, life insurance and disability-benefits business, of
more than $700 million.
COMPUTER ASSOCIATES: New Documents Present Evidence V. Top Executives
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New documents presented by plaintiffs in the class action against
Computer Associates, Inc. alleged that the Company's top executives
manipulated revenue from foreign sales offices to "make the reported
number look good," saddled the Company with burdensome acquisitions and
fired employees to conceal a "deteriorating financial condition,"
Newsday.com reports.
The suit was commenced in the United States District Court in Central
Islip, alleging the Company violated federal securities class action by
improperly booking "demonstration" software as new sales, routinely
back-dating contracts and "sprinkling" free software into contract
maintenance deals to prematurely recognize revenue. The suit names as
defendants the Company, and:
(1) Sanjay Kumar, CEO,
(2) Ira Zar, CFO,
(3) Charles Wang, chairman,
(4) Russell Artzt, executive vice president and
(5) Ernst & Young, former CA auditor
In addition to questioning the Company's sales practices, the suit
blasts the Company's new business model and pro-forma accounting, which
it calls a "complete sham." The suit also alleges the Company's former
independent auditor, Ernst & Young, saying the firm "turned a blind eye
to CA's improper accounting," and "utterly failed in its role as an
auditor as defined by the SEC."
According to a Newsday.com report the suit stated that, "In fact, a
former CA employee stated that in many instances, defendant (chief
executive Sanjay) Kumar personally approved transactions so that
revenue could be recorded . In fact, a former assistant to CA's (chief
financial officer Ira Zar) stated, `Kumar and the CFO would have a
rough draft of the reporting period's numbers and see the revenue; if
they did not like the numbers, then they would add revenue from CA's
foreign offices just to increase the revenue to make the reported
number look good.'"
The Company dismissed the suit, saying it "should have been filed on
recycled paper."
"It is just the latest effort by class-action lawyers to rehash old
allegations that have been made against CA before," spokesman Robert
Gordon told Newsday.com. "They raise the same tired concerns on the
wisdom of past CA acquisitions or the propriety of the company's
revenue recognition practices, even though these practices were applied
consistently for nearly 20 years."
The Company, he continued, "will respond in court at the appropriate
time, and we remain confident that the legal system will see these
charges for the baseless claims that they truly are."
"We're confident the allegations will be sustained by the judge," Frank
Karam, an attorney for Milberg Weiss Bershad Hynes & Lerach in
Manhattan, lead counsel for shareholders, told Newsday.com.
CREDIT SUISSE: Faces New Civil Lawsuit Over Securities Act Violations
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Credit Suisse First Boston Corporation faces a civil class action filed
in the United States District Court in Boston, Massachusetts on behalf
of shareholder Patricia Maillet, by Boston law firm Shapiro Haber &
Urmy LLP.
According to the Boston Business Journal, the suit alleges that
analysts with Credit Suisse First Boston, known as CSFB, issued reports
publicly touting shares of Agilent Technologies Inc. of Palo Alto,
Calif., while privately warning prized clients away from the company's
securities. Filed the same day as Galvin's complaint, the lawsuit
could be the first of a tidal wave of litigation against the investment
bank based on investigative work by the secretary of state's office.
Ms. Maillet's attorney Thomas G. Shapiro told the Journal that the firm
mad the stocks attractive to investors by misleading analyst research
that eventually was exposed as bogus. Court documents refer to e-
mails, uncovered by Secretary of State William Galvin's office, bad-
mouthing Agilent stock.
One in particular describes what came to be known as the "Agilent two-
step," whereby an analyst hangs a "buy" rating on a stock that he
privately dislikes. "The average investor was not privy to any
(contradictory) verbal information from CSFB," according to the Galvin
report.
The firm has denied the allegations made in Mr. Galvin's report.
Mr. Galvin earlier filed a suit against CSFB, alleging that it misled
investors by allowing its investment-banking division to exert undue
influence on the firm's research department, the Boston Business
Journal reports. Mr. Shapiro said that Galvin's legwork, much of which
was made public prior to the Oct. 21 unveiling of the complaint,
provided the basis on which his client sued.
The secretary of state's labors could spark an explosion of class-
action suits against CSFB, experts said. "Usually it's not just one,"
a plaintiff's lawyer, who asked not to be identified, told the Journal.
"You'll usually see many."
DAYTON POWER: Experts Say Company Board Unable To Protect Shareholders
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Some specialists who study the operation of corporate boards believe
the board of the holding company for Dayton Power and Light, DPL, is
not independent enough to adequately protect shareholder interests, the
Dayton Daily News reports, according to the Associated Press Newswires.
The newspaper recently said that there are questions about how
independent the board's directors can be when the board and some of its
key committees are stacked with directors who either have substantial
business dealings with the company or are on its payroll. At least
five of DPL's 11 board members have direct financial ties to DPL, and
two of the board's three most powerful committees include directors
with financial ties to the company.
For example, two board members are representatives of the New York
leveraged buyout firm Kohlberg Kravis Roberts & Co. (KKR). They joined
the board in 2000, as part of a deal in which KKR invested $550 million
in DPL, the newspaper said.
Under terms of the deal, KKR must approve any merger, acquisition,
spin-off or sale of "a material portion" of DPL's assets. The firm
also receives $1 million a year from DPL for management, consulting and
financial services, according to the newspaper.
Because of KKR's control, "you really have something that begins to
look like a privately held company masquerading as a public company,"
said Ric Marshall, chief executive for The Corporate Library, a rating
service that grades company boards for institutional investors and
monitors governance issues.
The Corporate Library recently dropped the DPL board's grade from "D"
to "F." Mr. Marshall said that rating is based on the board's lack of
independence and failure to monitor investments in risky private
equities.
Specialists in corporate governance said that insider-controlled
nominating committees can prevent boards from being adequately
independent. Three of the five voting members of the DPL board's
nominating committee have financial stakes in DPL's investment
portfolio.
The threat is that they will dominate the process and squelch
opposition to management through the threat not to re-nominate
dissident board members, said Charles Elson, director of the Center for
Corporate Governance at the University of Delaware.
Board independence from management is one of the aims of pending
revisions of New York Stock Exchange standards. The proposed changes
would ban insiders from committees that nominate board members, set
executive and director compensation and work with independent auditors
to oversee corporate finances.
Losses in DPL's portfolio led this summer to a $155 million
devaluation, restated earnings, several class actions and a
plunge in its stock price.
"For the directors either to directly approve or allow by the sin of
omission this much of shareholders' dollars to be placed in private
equities is a gross failure on the part of the board to protect
shareholder value," Mr. Marshall said.
FLORIDA: Miramar Homeowners Pursue Relief From Blasting Disturbances
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About 125 homeowners in the city of Miramar, Florida, upset about
ongoing blasting in neighboring Miami-Dade County, recently packed the
Miramar City Hall to seek relief from city leaders and state
legislators, The Miami Herald reports.
City commissioners gave assurances that they would continue to fight
for some relief, even if it means piggybacking on a class action filed
in Miami Dade County.
"We feel all your frustrations," said Commissioner Marjorie Conlan.
"This will be a journey, and we will stick with you."
At the recent City Hall meeting, one of the homeowners said that "The
blasts shake our homes, rattle our windows and crack our tiles. We
need to reduce the levels to how it was before in Dade County." The
homeowners say the level of blasting has increased in Miami-Dade in the
past months, causing cracks in walls and floors.
The shifting of responsibility among some officers of government has
taken on the aspects of an ongoing game: Gabriel Mazzeo, attorney for
the state fire marshal's office, said fire marshals cannot regulate
blasting levels. "If the limits are too high, the resolution of that
problem lies in the legislature," he said.
On the other hand, State Senator Steven Geller (D-Hallandale Beach)
said that construction mining is "largely a local issue" that probably
would not get much support from his legislative colleagues. However,
the Senator, who will be representing Miramar because of redistricting,
promised to fight for a change in the blasting level.
Previously, developers blasted in western Miramar to prepare the land
for construction. Now, blasting is not allowed in Miramar, but it is
allowed in rock quarries in Miami-Dade County.
FREDDIE MAC: Faces Suit For Violations of Fair Credit Reporting Act
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Lending company Freddie Mac faces a class action in the United States
District Court in Philadelphia, alleging violations of the federal Fair
Credit Reporting Act.
The suit alleges that hundreds of thousands of home loan applicants
nationwide have been rejected or assessed higher fees without receiving
the required notices and protections under the Fair Credit Reporting
Act, ctnow.com reports.
The suit further asserts that the Company committed multiple violations
of the law and seeks damages on behalf of all mortgage applicants
rejected or charged higher rates through the Company's underwriting
system during the past two years.
The federal Fair Credit Reporting Act is unfamiliar to many homebuyers,
but this case might just bring new attention to it. According to
ctnow.com, the act governs lenders, landlords and others who obtain and
use credit reports and scores to make decisions on consumers' credit
applications. If a lender uses credit file information to reject an
applicant or charge a higher interest rate, the lender is required to
provide what the law terms an "adverse action" notice.
That notice explains precisely what adverse action was taken, and
identifies the credit reporting agencies whose information contributed
to the decision. The applicant can then challenge or seek to correct
the credit file information if it's in error.
Philadelphia resident Donald Weidman filed the suit. Mr. Weidman
applied for a home mortgage last year through several lenders who used
Freddie Mac's electronic underwriting system to process his
applications. The system, known as Loan Prospector, allows lenders
around the country to submit applications online and receive a funding
and pricing decision almost instantly from Freddie Mac.
Freddie Mac purchases billions of dollars worth of mortgages annually
from thousands of originating lenders nationwide. It retains the loans
in its investment portfolio or packages them into bonds for sale to
other investors.
Though the details of Loan Prospector are proprietary secrets, Freddie
Mac has confirmed that the system orders and runs credit file data
through statistical models to evaluate borrower risk. Rival mortgage
investor Fannie Mae has a similar electronic system and was sued in a
class action last month alleging fair lending, equal credit opportunity
and fair credit violations, ctnow.com reports.
The suit further states that each of Mr. Weidman's applications passed
through the Company's system. Because of the Company's negative
electronic evaluation, Mr. Weidman's applications were denied. He
added that he was never given an explanation of its adverse evaluation,
never identified the sources of its credit information, nor gave him an
opportunity to review the credit file data that harmed him as a loan
applicant.
Company officials had no immediate comment, ctnow.com reports.
HMO LITIGATION: Defendants Request Stay of Discovery, Pending Review
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The six insurer defendants in the managed health care suit asked the
United States District Court for the Southern District of Florida to
stay all discovery in the suits, saying there are "unsettled" issues
and that a stay is essential if the court and the parties are to avoid
"wholesale chaos in the discovery process and the potential waste of
tens of millions of dollars in discovery costs," mealys.com reports.
The six companies; Aetna, CIGNA, Health Net (Foundation Health),
Humana, PacifiCare, Prudential, United and Wellpoint, filed the motion
in court, asking it to enter an order staying all discovery in the
provider track cases pending resolution by the 11th Circuit U.S. Court
of Appeals of their petition for review under Federal Rule of Civil
Procedure 23(f) and resolution by the MDL court of their motion to
dismiss the provider plaintiffs' second amended consolidated class
action complaint and their motions for arbitration.
The potential scope of discovery in the provider track cases, if
allowed to proceed as a class on the claims as pleaded in the second
amended consolidated class action complaint is "almost beyond
comprehension," the health insurers contend, mealys.com reports.
"As pled on a class-wide basis, this dispute encompasses billions of
claims submitted by over 600,000 providers against ten managed care
organizations for services provided to over 145 million health plan
members over the span of 12 years. Defendants collectively employ over
one hundred-fifty thousand employees and have generated billions of
pieces of paper and electronic data associated with those claims --
many times the volume of the entire Library of Congress and virtually
all of which may be the target of discovery requests," they argue.
LIVENT INC.: CIBC To Settle Securities Fraud Suit For $2.2 Million
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The Canadian Imperial Bank of Commerce agreed to settle an American
securities class action filed on behalf of Livent, Inc. stockholders
for US$2.2 million, Canada.com reports. Arthur Stock, a lawyer
representing the investors, said yesterday the two sides have reached a
tentative settlement over allegations the bank's brokerage arm failed
to disclose a secret side deal it had with the failed theatre company.
Livent's co-founders Garth Drabinsky and Myron Gottlieb were each
charged with 19 counts of fraud over $5,000 this week by the RCMP,
which has accused them of falsifying the Company's books and defrauding
investors and creditors of nearly $500-million, Canada.com reports.
Two other former executives, Gordon Eckstein and Robert Topol, were
also charged criminally following a four-year police investigation into
accounting practices at the company. All four defendants surrendered
to the RCMP on Tuesday and were later released on bail, Canada.com
states.
The United States Securities and Exchange Commission (SEC) also
launched a civil suit against the four executives, alleging violations
of 17 securities laws. Additionally, all four executives were named in
the consolidated class action effort in US federal court that includes
CIBC as a defendant.
The federal suit alleges that the Company paid Livent a non-refundable
fee of US$4.6-million in 1997 in exchange for production and royalty
rights. Livent booked that sum as income, but the lawsuit maintains an
undisclosed side-letter required the company to repay the amount to
CIBC within six months, Canada.com reports.
A spokesman for CIBC declined to comment on the matter, or on
speculation the bank has reached a similar agreement in principle with
a group of Livent noteholders that have lodged a separate class action,
Canada.com reports.
MENORAH GARDENS: Lawyers Want Documents Available To Other Firms
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The desecration lawsuit against the Menorah Gardens cemetery chain
hasn't even been certified as a class action, but the plaintiffs'
lawyers are already squabbling over money, the Miami Herald reports.
Lawyers for the plaintiffs in Florida want Broward County Judge J.
Leonard Fleet to declare materials generated by them relating to the
case, both private and public, to be available to other law firms,
provided these firms contribute to the cost, lawyer Ervin Gonzalez told
the Miami Herald.
Several suits were filed against the Menorah Garden Cemeteries in
Broward and Palm Beach, Florida, asserting that the cemetery oversold
plots, buried people in the wrong place and dumped bodies in the woods
to make way for new vaults.
Lawyers in Miami and Fort Lauderdale who represent more than 1,400
people say they've spent more than $150,000 on depositions,
transcripts, documents, travel, photographs, videotapes and other
expenses, the Miami Herald reports. They say West Palm Beach lawyers
separately representing 40 other plaintiffs have since gone down to the
Broward County Courthouse and obtained all their material for the cost
of photocopying.
In his motion, Mr. Gonzalez says, "The establishment of a fund prevents
free riding... Rather than having those lawyers have to recreate the
wheel," he said in an interview, "we're willing to provide them
anything they need, in accordance with equitable sharing agreements."
Broward County Judge J. Leonard Fleet, who is handling the larger case,
will decide. A hearing had been set for Thursday, but Mr. Gonzalez
withdrew the motion and nothing will happen before January, because
Judge Fleet has yet to certify the suit as a class action. "It doesn't
become an issue unless we get certified," Mr. Gonzalez told the Herald.
However, Ted Leopold, one of the West Palm Beach lawyers, said it's not
unusual for lawyers to share materials, and he has given "hundreds of
thousands of documents" to Gonzalez on other cases. "They're just not
happy because they place documents in the public domain," Mr. Leopold
told the Herald. "If they want to have any materials we've done, I'm
happy to give them free of charge. I believe very strongly in sharing,
and I would not ask them to pay me a penny for it."
TEXAS: Group To File Suit If Galveston Restricts Vehicles From Beaches
----------------------------------------------------------------------
Some beach users vow the city of Galveston, Texas will end up in court
if it adopts a plan that would keep fishermen and others from driving
on beaches that have been open to vehicles for decades, the Houston
Chronicle reports.
"The citizens of Texas stand poised to stop you from taking away
prescriptive rights in both state and federal courts," Samuel Lucas,
president of the 1,200-member Coalition of Confused Coastal Fishermen,
recently told the Galveston Planning Commission during a marathon
public hearing.
The commission is deciding whether to recommend that the city bar
vehicles from most of a 3.5-mile stretch of beach near San Luis Pass at
the far west end of Galveston Island. Commissioners will hold another
workshop on the plan November 12. After that, the City Council will
consider the plan and forward it to the Texas General Land Office for
approval.
Opponents of the recommendation, or plan, maintain that it violates the
Texas Open Beaches Act. They say that the city regulates beach traffic
to accommodate developers instead of the general public. "This is not
a beach access plan," said Mr. Lucas. "This is a beach restriction
plan."
"This is not an idle threat," Mr. Lucas added, promising a class action
court battle over beach access. "We will begin with a request for
injunctive relief against implementation of such a plan."
While Mr. Lucas claims there have been many beach access violations by
the city, the Texas General Land Office, in 1994, gave tentative
approval to a city plan that barred driving on most of the island's
western beaches as long as public parking and access points were
established every half-mile. The draft plan now before the commission
generally follows that guideline. In the 1994 plan, the city left open
to vehicles approximately 3.5 miles of beach on the island's far west
end.
The proposed plan also calls for establishment of a bird sanctuary at
San Luis Pass, a measure that almost all groups, including the Houston
Audubon Society, generally support. The pass area is a resting and
nesting ground for numerous shore-bird species, "a crown jewel" of the
Gulf Coast, society president Jeff Mundy, told the commissioners.
Some subdivisions have provided off-beach parking areas in return for
the city blocking traffic on beaches in front of subdivisions.
"I think we all see that it is going to boil down to a court of law,"
Timothy Lopas, a longtime San Luis Pass-area fisherman and a founder of
Texas Open Beach Advocates, said recently.
New Security Fraud Cases
ATLAS AIR: Leo Desmond Commences Securities Fraud Suit in S.D. New York
-----------------------------------------------------------------------
The Law Offices of Leo W. Desmond initiated a securities class action
on behalf of shareholders who acquired Atlas Air Worldwide Holdings,
Inc. (NYSE:CGO) securities between April 18, 2000 and October 15, 2002,
inclusive, in the United States District Court for the Southern
District of New York against the Company, (F/K/A Atlas Air, Inc.) and:
(1) Richard H. Shuyler,
(2) Brian H. Rowe,
(3) Douglas A. Carty,
(4) Stanley J. Gadek,
(5) James T. Matheny and
(6) Stuart G. Weinroth
It is alleged that defendants violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market throughout the class period which statements
had the effect of artificially inflating the market price of the
Company's securities.
For more details, contact Leo W. Desmond by Phone: 888-337-6663 or
561-712-8000 by E-mail: Info@SecuritiesAttorney.com or visit the firm's
Website: http://www.SecuritiesAttorney.com
ATLAS AIR: Dyer & Shuman Commences Securities Fraud Suit in S.D. NY
-------------------------------------------------------------------
Dyer & Shuman, LLP initiated a securities class action on behalf of
purchasers of the securities of Atlas Air Worldwide Holdings, Inc.,
formerly known as Atlas Air, Inc. (NYSE:CGO), during the period between
April 18, 2000 and October 15, 2002, inclusive, in the United States
District Court for the Southern District of New York against the
Company and certain of its officers and/or directors.
The complaints allege that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between April 18, 2000 and October 15, 2002, thereby
artificially inflating the price of Company securities.
Throughout the class period, defendants issued positive statements
regarding the Company's net income and financial performance.
Defendants' statements were materially false and misleading because
they failed to disclose material adverse facts known to defendants or
recklessly disregarded by them. For example, the Company lacked
adequate internal controls and was overstating its inventory,
maintenance expense, and allowance for bad debt.
As a result of these practices, the Company's net income and financial
results were materially overstated, thereby artificially inflating the
Company's stock price throughout the class period.
On October 16, 2002, the Company issued a press release announcing the
initiation of a re-audit of its financial results for fiscal years 2000
and 2001, and disclosed that it would restate its previously-issued
financial reports.
The press release also revealed that the Company expected that "the
cumulative impact through 2001" would "reduce after-tax income by
roughly $60 million to $65 million." However, prior to these
disclosures certain of the Company's executives sold over $65 million
worth of their own CGO securities and the Company itself raised over
$95 million through the sale of 3 million shares of its stock.
For more details, contact Trig Smith by Mail: 801 E. 17th Avenue,
Denver, CO 80218 by Phone: 303-861-3003 or 800-711-6483 by Fax:
303-830-6920 by E-mail: tsmith@dyershuman.com
AVISTA CORPORATION: Schiffrin & Barroway Files Securities Suit in WA
--------------------------------------------------------------------
Schiffrin & Barroway LLP initiated a securities class action against
Avista Corp. (NYSE:AVA) claiming that the company misled investors
about its business and financial condition, in the U.S. District Court
for the Eastern District of Washington on behalf of all investors who
bought Avista Corp. securities between November 23, 1999 through August
13, 2002.
The complaint alleges that the Washington-based Avista Corp. made
misstatements of material facts and omitted to state material facts in
their public statements and elsewhere, including failing to disclose
that:
(1) Avista was engaged in highly risky energy trading activities
with Enron and PG&E ("PG&E or "Portland General Electric")
involving so-called "Ricochet" or "megawatt laundering" trades
in which Avista acted as a middleman between Enron and PG&E so
that Enron could evade California's caps on electric power
prices and charge California artificially high prices for
electricity;
(2) Avista routinely acted as a middleman between affiliates such
as Enron and PG&E in order to facilitate transactions to
proceed which would have been prohibited under federal rules
if the affiliates had engaged in them without an intermediary;
and
(3) Avista was and is exposed to substantial contingent legal
liabilities as a result of the foregoing, including the
threatened revocation of its license to trade electric power
on the wholesale markets, or market-based rate authority, by
the Federal Energy Regulatory Commission.
The complaint alleges that on August 14, 2002, after the Federal Energy
Regulatory Commission announced that it may take formal enforcement
action on charges that Avista helped manipulate California power prices
during 2000, Avista stock tumbled 11.85 percent, and on September 17,
2002 Avista stock traded at as low as $11.10 per share, down from its
class period high of $67.55.
For more details, contact the Shareholder Relations Manager by Phone:
888-299-7706 (toll free) or 610-822-2221 by E-mail: info@sbclasslaw.com
or visit the firm's Website: http://www.sbclasslaw.com
CIGNA CORPORATION: Milberg Weiss Commences Securities Suit in E.D. PA
---------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of CIGNA Corporation
(NYSE: CI) between May 2, 2001 to October 24, 2002, inclusive, in the
United States District Court for the Eastern District of Pennsylvania,
against the Company and:
(1) H. Edward Hanway (CEO, President and Chairman),
(2) James G. Stewart (CFO) and
(3) James A. Sears (Chief Accounting Officer)
The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between May 2, 2001 to October 24, 2002.
According to the complaint, the Company issued numerous press releases,
and filed financial reports with the SEC, regarding its performance
during the class period which represented that the Company was
experiencing strong growth, that its operating income for 2002 is
expected to be $1.1 billion and that its liabilities on its
discontinued reinsurance operations were not expected to be material to
its liquidity.
The complaint further alleges that these, and other, representations
were materially false and misleading because they failed to disclose
that the Company had been under-reserving for its reinsurance
obligations, particularly for its reinsurance of guaranteed minimum
death benefits (GMDB), by (at least) hundreds of millions of dollars.
In addition, according to the complaint, the statements were materially
false and misleading because the Company was experiencing declining
demand for its offerings, particularly in its Employee Health Care,
Life and Disability segment, and its income guidance for 2002 was
lacking in any reasonable basis when made.
The suit further alleges that defendants engaged in the conduct alleged
therein because the Company was planning to, and on October 16, 2002,
did, issue $250 million of 6 3/8% notes and that the offering would
have been negatively affected if the truth regarding the Company's
business and financial condition was known.
On September 3, 2002, after the market closed, the Company issued a
press release announcing that it will take a $720 million after-tax
($1.1 billion pre-tax) charge in order to manage its GMDB liabilities,
but reaffirmed its previously issued guidance for 2002.
In response, credit ratings agencies Standard & Poor's and Fitch
reduced the Company's credit rating and stock price dropped by 6%.
Then, on September 24, 2002, after the close of trading, the Company
shocked the market by announcing that, contrary to its recent
reaffirmations, it would not meet its 2002 earnings guidance due to
weakness in its Employee Health Care, Life and Disability segment.
In reaction to the announcement, the price of the Company's common
stock plummeted by 42%, falling from a $63.60 per share close on
October 24, 2002 to trade as low as $36.81 per share on October 25, on
extremely heavy trading volume.
For more details, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by
Phone: 800-320-5081 by E-mail: cignacase@milbergNY.com or visit the
firm's Website: http://www.milberg.com
CIGNA CORPORATION: Charles Piven Commences Securities Suit in E.D. PA
---------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired CIGNA Corp. (NYSE:CI)
securities between May 2, 2001 to October 24, 2002, inclusive, in the
United States District Court for the Eastern District of Pennsylvania,
against the Company and:
(1) H. Edward Hanway,
(2) James G. Stewart and
(3) James A. Sears
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market (including failing to disclose that it had been under-reserving
for its reinsurance obligations) throughout the class period which
statements and omissions had the effect of artificially inflating the
market price of the Company's securities.
For more details, contact Charles J. Piven, PA by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
ELECTRONIC DATA: Much Shelist Lodges Securities Fraud Suit in E.D. TX
---------------------------------------------------------------------
Much Shelist Freed Denenberg Ament & Rubenstein, PC initiated a
securities class action against Electronic Data Systems Corporation
(NYSE:EDS) in the United States District Court Eastern District of
Texas, Texarkana Division, on behalf of all persons and entities who
purchased Company securities during the period September 7, 1999
through September 24, 2002, inclusive. The suit names as defendants
the Company and:
(1) Richard Brown, Chairman of the Board and Chief Executive
Officer,
(2) Paul Chiapparone, Vice Chairman, and
(3) James Daley, Executive Vice President,
The suit alleges violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
and Sections 11, 12 and 15 of the Securities Act of 1933. The
securities violations arise from defendants' issuance of a series of
allegedly materially false and misleading statements to the market
during the class period.
Specifically, the suit alleges that defendants misrepresented and/or
omitted material facts, including:
(i) failing to disclose that EDS' backbone revenue for its
information solutions IT outsourcing business is highly
susceptible to interruptions due to terms in EDS' service
contract that enables EDS' customers to unilaterally suspend
discretionary spending on IT outsourcing;
(ii) affirmatively misrepresenting the predictability of EDS'
future cash flows by counting the anticipated revenue that EDS
would supposedly receive from its IT outsourcing service
contracts with customers without disclosing that payment under
such contracts were not guaranteed;
(iii) failing to disclose the risk that EDS' airline infrastructure
outsourcing assets that it acquired in its acquisition of
Sabre Holding Corp. were subject to a drastic decrease in
value if US Airways declared bankruptcy; and
(iv) failing to disclose that EDS faced significant potential
threats to its liquidity if its share price fell out because
of put-option and other obligations that ultimately obligated
EDS to in effect buy back a total of 5.44 million shares of
EDS stock at fixed prices averaging over $60 per share.
Defendants' Securities Act violations stem from these alleged
misrepresentations and omissions of material fact in Securities and
Exchange filings, which they incorporated by reference into the
registration statement they used to offer EDS stock through EDS'
dividend reinvestment plan.
On September 18, 2002 after executives of EDS warned that a lack of new
revenues would wipe out more than $.60 per share of its third quarter
fiscal year 2002 earnings target of $.74, the price of EDS stock
plummeted to a 52-week low of $20, down from a class period high of
$72.45.
After further revelations regarding EDS' put-option and other
liabilities emerged in the wake of the foregoing disclosures, EDS'
share price tumbled even further, reaching an intra-day low of $10.09
on September 24, 2002.
For more details, contact Carol V. Gilden by Phone: 800-470-6824 by E-
mail: investorhelp@muchshelist.com
ESS TECHNOLOGY: Schiffrin & Barroway Commences Securities Suit in CA
--------------------------------------------------------------------
Schiffrin & Barroway LLP initiated a securities class action against
ESS Technology Inc. (Nasdaq:ESST) claiming that the company misled
investors about its business and financial condition, in the U.S.
District Court for the Northern District of California on behalf of all
investors who bought ESS Technology Inc. securities between January.
23, 2002 and September 12, 2002.
The complaint alleges that the Company disseminated false and
misleading statements concerning the Company's operations and its
prospects for 2002. Taking advantage of the inflation in ESS stock,
certain of the Company's officers sold $1.8 million worth of their own
Company stock at artificially inflated prices of as much as $25.78 per
share, while the Company itself sold $45.5 million worth of its own
stock.
For more details, contact Shareholder Relations Manager by Phone:
888-299-7706 (toll free) or 610-822-2221 by E-mail: info@sbclasslaw.com
or visit the firm's Website: http://www.sbclasslaw.com
QUADRAMED CORPORATION: Weiss & Yourman Lodges Securities Suit in CA
-------------------------------------------------------------------
Weiss & Yourman LLP initiated a securities class action against
QuadraMed Corporation (NASDAQ:QMDCE), and certain of its officers and
directors in the United States District Court for the Northern District
of California, on behalf of purchasers of QuadraMed securities, between
May 11, 2000 and August 11, 2002.
The complaint charges the defendants with violations of the Securities
Exchange Act of 1934. The complaint alleges that defendants issued
false and misleading statements which artificially inflated the stock.
For more details, contact James E. Tullman, David C. Katz, and/or Mark
D. Smilow by Mail: The French Building, 551 Fifth Avenue, Suite 1600,
New York NY 10176 or by Phone: 888-593-4771 or 212-682-3025.
QUADRAMED CORPORATION: Leo Desmond Commences Securities Suit in N.D. CA
-----------------------------------------------------------------------
The Law Offices of Leo W. Desmond initiated a securities class action
on behalf of shareholders who acquired QuadraMed Corporation
(Nasdaq:QMDCE) securities between May 11, 2000 and August 11, 2002,
inclusive, in the United States District Court for the Northern
District of California against the Company and:
(1) Lawrence P. English and
(2) Mark N. Thomas
It is alleged that defendants violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market throughout the class period which statements
had the effect of artificially inflating the market price of the
Company's securities.
For more details, contact Leo W. Desmond by Phone: 888-337-6663 or
561-712-8000 by E-mail: Info@SecuritiesAttorney.com or visit the firm's
Website: http://www.SecuritiesAttorney.com
SALOMON SMITH: Weiss & Yourman Commences Securities Fraud Suit in NY
--------------------------------------------------------------------
Weiss & Yourman LLP initiated a securities class action against
defendants Citigroup, Inc., Salomon Smith Barney, Inc. and Jack Grubman
on behalf of purchasers of XO Communications, Inc. (OTCBB:XOXOQ) was
commenced in the United States District Court for the Southern District
of New York, on behalf of purchasers of the Company's securities
between October 11, 1997 and November 1, 2001.
The complaint charges the defendants with violations of the Securities
Exchange Act of 1934. The complaint alleges that defendants issued
false and misleading statements artificially inflating the stock.
For more details, contact David C. Katz, Mark D. Smilow, and/or James
E. Tullman by Mail: The French Building, 551 Fifth Avenue, Suite 1600,
New York, New York 10176 by Phone: 888-593-4771 or 212-682-3025 by E-
mail: info@wynyc.com
SALOMON SMITH: Weiss & Yourman Commences Securities Suit in S.D. NY
-------------------------------------------------------------------
Weiss & Yourman LLP initiated a securities class action against
defendants Salomon Smith Barney, Inc. and Jack Grubman on behalf of
purchasers of Metromedia Fibre Network, Inc. (OTC:MFNXQ.PK) in the
United States District Court for the Southern District of New York, on
behalf of purchasers of Company securities between November 25, 1997
and July 25, 2001.
The complaint charges the defendants with violations of the Securities
Exchange Act of 1934. The complaint alleges that defendants issued
false and misleading statements which artificially inflated the stock.
For more details, contact Mark D. Smilow, David C. Katz, and/or James
E. Tullman by Mail: The French Building, 551 Fifth Avenue, Suite 1600,
New York, New York 10176 by Phone: 888-593-4771 or 212-682-3025
SALOMON SMITH: Weiss & Yourman Commences Securities Fraud Suit in NY
--------------------------------------------------------------------
Weiss & Yourman LLP initiated a securities class action against Salomon
Smith Barney, Inc. and Jack Grubman on behalf of purchasers of
Metromedia Fibre Network, Inc. (OTC:MFNXQ.PK) between November 25,1997
and July 25,2001 in the United States District Court for the Southern
District of New York.
The complaint charges the defendants with violations of the Securities
Exchange Act of 1934. The complaint alleges that defendants issued
false and misleading statements which artificially inflated the stock.
For more details, contact Mark D. Smilow, David C. Katz, and/or James
E. Tullman by Mail: The French Building, 551 Fifth Avenue, Suite 1600,
New York, New York 10176 by Phone: 888-593-4771 or 212-682-3025
SEARS ROEBUCK: Bernstein Liebhard Commences Securities Suit in N.D. IL
----------------------------------------------------------------------
Bernstein Liebhard & Lifshitz LLP initiated a securities class action
in the United States District Court for the Northern District of
Illinois on behalf of all persons who acquired securities of Sears,
Roebuck & Co. (NYSE:S) between January 17, 2002 and October 17, 2002.
Plaintiff alleges that the Company and certain of its officers and
directors issued false statements concerning its business and financial
condition. Specifically, plaintiff alleges that defendants, throughout
the class period, represented that the Company's earnings were growing
well, driven by its Credit and Financial Products segment and that it
would achieve earnings growth of 22% in 2002 over 2001.
In addition, in each of its press releases and public filings during
the class period, the Company reported its provisions for uncollectible
accounts and in its 2001 annual report, defendants represented that
such reserves were "adequate." These, and other statements detailed in
plaintiff's complaint, were allegedly materially false and misleading
because they did not disclose that the Company's risk for uncollectible
accounts had increased materially throughout the class period and, in
addition, that the Company was under-reserving for its uncollectible
accounts which inflated its earnings and balance sheet.
On October 17, 2002, the Company reported in a press release that its
2002 earnings would grow by 15%, rather than the 22% it reaffirmed as
recently as ten days previously, because of a "$222 million increase in
the domestic provision for uncollectible accounts."
In addition, according to the press release, earnings for the third
quarter were 26% less than the previous year. In reaction to the press
release, the price of the Company's common stock plummeted, falling
32%, from an October 16, 2002 close of $33.95 per share to a $23.15
close on October 17th, on heavy trading volume.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations by Phone: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 or by E-mail: SEARS@bernlieb.com or
visit the firm's Website: http://www.bernlieb.com.
ST. PAUL: Charles Piven Commences Securities Fraud Lawsuit in MN Court
----------------------------------------------------------------------
The Law Offices of Charles J. Piven, PA initiated a securities class
action has been commenced on behalf of shareholders who acquired The
St. Paul Companies, Inc. (NYSE:SPC) securities between November 5, 2001
and July 9, 2002, inclusive, in the United States District Court for
the District of Minnesota, against the Company, Chief Executive Officer
J. S. Fishman and Chief Financial Officer Thomas A. Bradley.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
ST. PAUL: Schiffrin & Barroway Lodges Securities Fraud Suit in MN Court
-----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the District of Minnesota on behalf of
all purchasers of the common stock of The St. Paul Companies (NYSE:
SPC) between November 5, 2001 and July 9, 2002, inclusive.
The complaint charges the Company and certain of its officers and
directors with issuing false and misleading statements concerning its
business and financial condition. Specifically, the complaint alleges
that defendants' omissions and misleading statements concerning St.
Paul's exposure to asbestos claims liability caused St. Paul's stock
price to become artificially inflated, inflicting damages on investors.
The complaint alleges that during the class period, defendants failed
to make adequate disclosures or take adequate reserves concerning
litigation filed in 1993 in California state court known as Western
MacArthur Co. et al. v. United States Fidelity & Guaranty Co., et al,
Case No. 721595-7 (consolidated with Case No. 828101-2, Superior Court
of California, Alameda County).
Plaintiff claims that although trial of the Western MacArthur
litigation commenced in approximately March 2002, the Company first
disclosed the existence of the litigation on or about May 15, 2002, but
did not disclose or quantify the amount or general magnitude of
potential exposure to liability which St. Paul might suffer as a result
of the litigation, nor did the Company increase its reserves at that
time.
On June 3, 2002, the Company announced that a settlement had been
reached whereby St. Paul would pay almost $1 billion to satisfy the
claims reflected in the litigation, although the Company's SEC filings
stated that as of December 31, 2001, the Company's net reserves for
asbestos claims was only $367 million.
The suit charges that the Company tried to disguise the impact of the
Western MacArthur litigation settlement by focusing on the alleged
after-tax impact of the litigation and falsely claiming that $150
million of the litigation payments could be charged to the Company's
reserves, and that a subsequent SEC filing by the Company reflected St.
Paul's failure to take adequate reserves for its potential liability in
the litigation.
News of the Western MacArthur litigation settlement caused the price of
the Company's stock to decline during the class period from a high of
$49.20 on November 5, 2001 to a low of $34.65 on July 9, 2002, the last
day of the Class Period.
For more details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
888-299-7706 (toll free) or 610-667-7706 or by E-mail:
info@sbclasslaw.com
TXU CORPORATION: Berman DeValerio Commences Securities Suit in N.D. TX
----------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities
class action against TXU Corporation (NYSE:TXU) and two of its top
officers, alleging the energy company defrauded its shareholders.
The suit was filed in the United States District Court for the Northern
District of Texas, Dallas Division. It seeks damages for violations of
federal securities laws on behalf of all investors who bought TXU
securities from January 31, 2002 through October 11, 2002.
The lawsuit claims that the defendants pumped up the company's stock
price by misrepresenting to the investing public the condition of TXU's
European operations throughout the class period. The complaint said
TXU lacked a reasonable basis for its earning projections for fiscal
2002 and 2003. Specifically, the defendants misled or failed to tell
investors that:
(1) TXU's operations in Europe and, specifically, those in the
United Kingdom were plagued with deficient, inadequate, and
faulty internal and financial controls;
(2) TXU's risk management in Europe was virtually non-existent,
and there was no means of addressing the risk to TXU from the
UK's unregulated electricity market;
(3) At least one credit facility worth approximately $500 million
contained "cross-default" provisions between TXU Europe and
TXU;
(4) TXU's U.K. operations used wholesale electricity "structured
transactions" to meet earnings goals in violation of Generally
Accepted Accounting Principles by shifting earnings and
profits from one quarterly period to another;
(5) The company's U.K. operations had entered into and carried
long-term electricity purchase contracts that were "out of the
money" by some $700 million; and
(6) The European operations were impaired and overvalued by
billions of dollars.
According to the complaint, the truth about TXU began to emerge on
October 4, 2002, when the company said it was revising its earnings
expectations for fiscal 2002 and 2003, and in the spate of news
articles and analyst reports that followed. The company revealed more
problems in an October 7, 2002 conference call with analysts.
Company stock plummeted as a result of these disclosures, falling from
a close of $32.90 per share on October 3, 2002 to $13.85 on October 8,
2002.
For more details, contact Michael J. Pucillo or Jay W. Eng by Mail: 515
North Flagler Drive, Suite 1701, West Palm Beach, FL 33401 by Phone:
561-835-9400 by E-mail: lawfla@bermanesq.com or visit the firm's
Website: http://www.bermanesq.com
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.
Copyright 2002. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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